The People of the State of New York, Plaintiff, v. George H. Freeman, Defendant

The People of the State of New York, Plaintiff, v. George H. Freeman, Defendant. Third Department, January 8, 1906. Lease of canal waters by State—when default in payment by lessee excused—Statute of Limitations not available to lessee seeking relief in equity from his default. When the use of waters from the State canal has been leased to the defendant’s predecessor in title by the Canal Commissioners at a yearly rental with the reservation of a right to revoke such lease, and with a provision for forfeiture if the rent is not paid, and said rent has not been paid for over fifty years and no demand for payment has been made by the State, and the State has not revoked the lease before a tender of back payments by the defendant, such failure to pay is not an abandonment of the lease, and, as the State has slept on its ’ rights, there is no forfeiture. But when such defendant seeks relief from his default in equity, he must pay the rent due and cannot avail himself of the Statute of Limitations which would bar an action therefor .by the People after twenty years. Under such circumstances the defendant should not be charged with interest on the moneys due before he took the lease by assignment, but should be charged with interest from said time. Submission of a controversy upon an agreed statement of facts pursuant to section 1279 of the Code of Civil Procedure. This is a submission of a controversy, upon facts admitted, pursuant to sections 1279 and 1280 of the Code of Civil Procedure. The Canal Commissioners of the State, pursuant to law, made a so-called lease, dated April 1, 1843, to Zenas Van Dusen and William Van Dusen of certain surplus waters from the Glens Falls feeder and dam, forming part of the canal system' of the State, the water to be taken and drawn from the dam at such places as the Canal Commissioners should deem most advisable for the security of the dam and the convenience of navigation of the feeder and canal. The commissioners reserved to themselves and to the Legislature the' right to limit and control or wholly resume the waters and all the rights granted, whenever in their opinion the safety of the dam and its appendages, or the necessary supply of water for the navigation of the canal and feeder, should render such limitation and control or resumption necessary, the said Van Dnsens “to pay to the Commissioners of the Canal Fund yearly, and every year hereafter, oil the first day of April in each year, the sum of One Hundred and five dollars,” being the appraised value of such surplus water, and they agreed to:pay the same. The said “lease” further provided : “ That if at any time the rent hereby reserved shall remain unpaid for one year after the same shall become due,- that this lease shall be 'forfeited to the State, and the said Commissioners may thereupon relet said surplus water to any other person in like manner as if no lease thereof had been executed.” The last payment of rental, it is conceded, was December 27, 1850, being to April 1, 1850. The said water was used to operate a mill of the. said Van Dusens abutting upon said feeder, and the defendant has succeeded by various mesne transfers and conveyances to said mill property and the rights of said Van Dusens under said.“ lease,” and the said mill and water has been so used by the defendant and his predecessors until about, two years ago, and since that time a custodian has remained in said mill, but it has not been operated. One O’Grady^ a section superintendent on the canal, put a new bulkhead in'the dam and closed the gates about two years ago, and after "the defendant "had stopped the operation of the mill; the stopping of the mill had no relation to the acts of said O’Grady, and the canal authorities took no action authorizing the action of said O’ Grady with-reference to closing said gates and putting in said bulkhead. The putting in of said bulkhead and the ^closing of the gates prevents the water being used at said mill if the defendant desired to use the same. Julius M. Mayer, Attorney-General and Horace McGuire, Deputy Attorney-General, for the plaintiff. Marcus T. Hun, for the defendant. [MAJORITY — Kellogg, J.:] Kellogg, J.: The “lease” óf these surplus waters Was valid and binding on the State. (Sweet v. City of Syracuse, 129 N. Y. 318) If the “lease ” was forfeited for the non-payment of the yearly “rental,” that event first occurred April 1, 1852, a-year after the first default in payment. - But the defendant and his predecessors in title have used said water'and enjoyed the full benefits of said “lease” ever since, the same as before, until about two years ago, when they ceased to use the water because the mill" was closed. Undoubtedly a forfeiture might have been declared for the first default in payment, or any subsequent default; but if not" then declared, and the lessee remains in full occupancy, and is still recognized as occupying under the “lease,” equity will not consider prior or subsequent defaults as an absolute forfeiture until a demand is made or some act done which restores the parties to their strict rights, or some affirmative action taken to enforce the forfeiture. It must be that the canal authorities knew of the continuous user by the defendant, and that his only right was the “lease,” and that they had no right to permit such use in the absence of a lease. The neglect of the lessee to pay was not an abandonment of the “ lease,” and while he continued to use the water he was liable for the agreed payment. The neglect of the State authorities to collect the payment or declare a forfeiture did not make the use of the waters by the defendant unlawful. Ueither party, therefore, is in a position to claim that the user was not under the “lease.” The acts of O’Grady may properly be ■ referred to the right of the State under the “ lease ” to keep the bulkhead in repair, and to dictate where and in what manner the waters are to be taken, and as the defendant was not using the water at that time, were not in hostility to his rights. The failure to operate .the mill and use the water for two years was not intended as an abandonment of the “lease,” but was for the convenience of the defendant, and was entirely consistent with his rights under the “lease.” While the defendant is occupying under said “lease,” but in default, in his payments, and in a position where a forfeiture may be enforced, before any proceedings are brought against him to declare such forfeiture, .or evidencing the same, he tenders the amount he considers due for rent and interest, $3,361.18, and offers to pay any further sum which the State authorities may decide to be due; after that the “ lease ” was, for the first 'time, declared by the State forfeited for non-payment. If the State was to declare a forfeiture, it should have acted promptly after the default. It cannot sleep on its rights for fifty-four years, while transfers of the property and business arrangements are made upon the theory that there is a right to use the water, and then insist upon prior defaults as a forfeiture, for after such a long sleep a court of equity will grant proper relief. The State has the right, even after this long lapse of timé, to wake up and- enforce its rights, and such rights, according to the letter and spirit -of the “ lease,?’ are to declare it forfeited and at an end unless the rent is fully paid. When a party' comes into a court.of equity for relief from his default in not paying money according, to his contract, as a condition for the relief he must pay in money and not -by pleading the Statute of .Limitations. The amount actually due the State is $1.05 per year from- April 1, 1850. Thisdias never been paid and the People are entitled to it,; and the defendant cannot be relieved from tlje effect of non-payment except by payment of the sanie? It is- true an action at law by the People to recover the money-would be barred after twenty . years, but a plea for relief asking the' favor of the court- proceeds updh the willingness of the party to pay, not just what, can b'e recovered "in a legal action,, because in a legal action -the defendant’s rights are-forefeit-ed, but just what- the party seeking.the relief has agreed to pay and failed to pay. The Statute of Limitations is one of repose — it does not pay a debt, or extinguish it ^ it only bars the remedy by action ; any other means the creditor has for realizing his debt are not affected.- (Johnson v. Albany & Susquehanna R. R. Co., 54 N. Y. 416 ; Rogers v. Murdock, 45 Hun, 30 ; Maxwell v. Cottle, 72 id. 529.) ' . The presumption of payment arising from a long lapse of time is rebuttable. (Macaulay v. Palmer, 125 N. Y. 742 ; Hulbert v. Clark, 128 id. 295.) Here the stipulation admits the non-payment. It does not. appear when the defendant first acquired title to the mill and began to use these waters. Considering the failure of the public authorities to collect these moneys and the permission of. the Use of the water for this long period of time, it does- not -seem, equitable‘.or necessary that the defendant should be charged With interest upon the moneys which became due before'he began to occupy the property and use the water,, but he should be charged with interest upon each payment as it became due after he began such use. The time the defendant began such.use does not appear. -That omission, may be supplied by stipulation, or a further.hearing may be had with reference thereto. Upon the payment by.thd defendant of the arrearages in rental and- the interest as above; within twenty days after judgment, he is relieved from' any forfeiture and the “ lease ” is declared still in force. If such payments. are not made, the “ lease ” is declared forfeited and at an end, and judgment goes against the defendant under his stipulation for twenty years’ rental at $105 per year, with interest on each payment from the time it became due. Ho costs are awarded. . All concurred. Judgment as per opinion.